Basic Financial Modelling in Excel A Two Day Programme This course is presented in London on: DATES TBD This course can also be presented in-house for your company or via live on-line webinar The Banking and Corporate Finance Training Specialist
Course Objectives The course is designed to support accountants and analysts working in corporate and SME businesses in creating financial models on a consistent and focussed basis. Some previous use of Excel is assumed, but delegates will not need an advanced knowledge. Course Content Course Overview Day One Introduction & Course Objectives Overall Model Structure & Design Best financial modelling practice Overall structure of the model Logic flow within the model Separation of inputs, calculations and outputs Defining desired outputs Setting-up required inputs Use of switches to allow option selection Use of flags to control timing factors Set-up for flexibility Consistency in the model Accommodating multiple options Building assumptions off term sheets or other external inputs Using the assumptions sheets as a sign-off document Restricting ranges of inputs and validation criteria Version control Use of the corkscrew technique Tracking changes Exercise creating a cash flow model with an assumptions / input sheet with built-in flexibility Modelling Techniques for Forecasting Translating assumptions & inputs into a model forecast Correct matching of units Treatment of fixed and variable costs Modelling pricing & revenue assumptions Use of lookup functions to change expenditure timings Building in sensitivities into the model Exercise add detailed cost calculations, lookup functions and sensitivities into the previous cash flow model Inflation / Escalation Factors Creating inflation indices Controlling start time of inflationary pattern Applying multiple rates to different cost & revenue items Varying inflation rates over life of the model Using exponential formulas for other forecasting purposes Exercise model multiple, variable rates and analyse a separate set of actual rates to compare to forecast
Day Two Modelling Taxes Differences between P&L and tax treatment for costs & revenues Allowing for deductibility and non-deductibility Capital allowances vs depreciation Modelling tax losses and their effect Example - review of an example of tax modelling for an investment project Exercise add tax calculations into the previous cash flow model Dealing with Circular References Circularity and consequences When does circularity most frequently occur? Solutions to circularity advantages and disadvantages of each Example demonstrate various methods to overcome circular references Cash Flow Modelling Principles of discounting of cash flows Setting the discount rate Modelling for: Timing of debt and equity funding Interest costs, capitalised interest Debt repayments Debt refinancing Dividends and other equity returns NPV, IRR and other DCF measures Exercise: add debt costs, interest payments, repayment profiles and dividends to the previous cash flow model, and discount the cash flows at an appropriate rate Comparing a Model to Previous Versions of the Model Separate runs and variation of inputs Comparison of actuals to forecast Comparing results of different versions of same model Reviewing future implications of variances Example from different versions of a modeled forecast, calculate variances and review future assumptions Sensitivity Analysis Stress-testing the model Varying inputs to assess effect on results Use of built-in sensitivity inputs Use of goal seek & solver Version control to allow comparison of outputs Use of Excel tools to support sensitivity analysis: data tables scenario manager
watch window function scenario tables Exercise from a given model of cash flows, P&L and balance sheet, calculate effect of varying inputs to a given degree, and stress-test model to break-even. Wrap-Up Overall review Key points to re-iterate Brief introduction to further exercises & reading Final questions and issues to discuss Course Overview Aims The principal aim of the course is enable participants to prepare logical and easy-to-use financial models in Excel to support transactions, forecasts and planning for ongoing business streams. The course will review best practice in model structures, calculations and logic, and using tools to highlight areas of risk, particularly in sensitivity analysis. Methodology The learning methods used are practical, as practice of newly-learned techniques enables a deeper and more effective building of skills. Each section will be covered briefly as a module in a traditional class style, but the real learning experience will be found in the exercises within each module. The trainer will support delegates during the exercises, answering questions and providing one-on-one help where needed. Suggested solutions to each exercise will be provided and discussed, and participants will be encouraged to review their work independently. Participants will be required to bring a laptop to the course. What Redcliffe s Clients are saying about the course: Wide range of Content -- IFC The examples were good -- Investment Banking Analyst, Oppenheimer
09:30-17:00 London Standard Price: 1,300 + VAT Membership Price: 1,040 + VAT In-House Training Delivering this course in-house for a number of participants could be very cost effective. The venue and timing can be agreed to suit the client, as well as the selection of the trainer and the precise contents of the seminar. Tailored Learning All of our training courses can be tailored to suit your company s exact training needs. We will work closely with you to help develop a training programme with content that is unique for your organisation. Please email us on enquiries@redcliffetraining.co.uk for more information E-Learning This course can also be presented as a bespoke e-learning programme created by you to fit your exact requirements.